Four Arrested in Scheme to Defraud Build it Back Program

Four New Yorkers, including one borough resident, have been charged with fraudulently submitting applications to the City’s Build it Back program resulting in the theft of nearly $300,000 in Superstorm Sandy relief funds, and a broader scheme by one of the defendants to steal more than $1 million in property from a deceased Rockaway homeowner, according to the Department of Investigation and Queens District Attorney’s Office.

In conjunction with the arrests, DOI issued a report on BIB and the Rapid Repairs program, documenting the findings of an interim investigation examining contractor invoices and field audits, which have resulted so far in savings of approximately $40 million in taxpayer funds, DOI Commissioner Mark Peters said last week.

George Bonitsis, 67, of Brooklyn; John Holl, 73, of East Meadow, Long Island; and John Phelan, 54, of Syosset, L.I., have each been arraigned on criminal complaints charging them with second-degree grand larceny and offering a false instrument for filing in the first degree.

Rockaway Park’s Donata Rea, 58, has been charged with first-degree grand larceny; second-degree criminal possession of a forged instrument; and offering a false instrument for filing in the first degree.

According to authorities, Bonitsis allegedly filed a false application with BIB in an attempt to have his secondary residence in Breezy Point rebuilt by the City. Bonitsis allegedly submitted an application in July 2013 to receive BIB assistance for a property on Bedford Avenue in Breezy Point, representing the property as his primary residence, according to the complaint. Construction on the site was halted after DOI commenced its investigation—however, Bonitsis had already received construction repairs valued at $125,802 in November 2015. The investigation found that Bonitsis’s primary residence was held in Brooklyn.

Holl allegedly filed a false application with BIB to repair a home in Breezy Point that he falsely claimed was his primary residence. According to the criminal complaint, he applied for BIB assistance for a property on Doris Lane in September 2013, representing the property as his primary residence. The application was approved in June 2016, and as a result, Holl fraudulently obtained $86,560 for reconstruction of the property, when, in fact, the investigation showed his primary residence was held in East Meadow, authorities said.

Phelan allegedly filed a false application with BIB to repair his and his mother’s secondary residence in Breezy Point. According to the criminal complaint, Phelan was listed as a co-applicant with his mother on a BIB application submitted in October 2013 for a property they co-own on Reid Avenue. Only Phelan’s signature appears on the BIB application, investigators said, which claimed the property was his and his mother’s primary residence. The application was approved in June 2016, and as a result, Phelan fraudulently obtained $66,371 for reconstruction of the property. The investigation found Phelan’s and his mother’s primary residences were actually held in Syosset and Maspeth, respectively.

And Rea allegedly filed a false application with BIB in connection with a larger scheme to take money from the estate of an elderly woman who died in 2011. According to the agency, as a result of DOI’s monitorship of BIB, investigators exposed Rea’s broader scheme to fraudulently assume ownership of homes owned by the deceased. This scheme resulted in Rea fraudulently obtaining benefits from the decedent in excess of $1 million.

“The defendants are accused of using one of the worst natural disasters to ever strike New York in recent history to unjustly enrich themselves by applying for public funds to which they were not entitled,” said Queens DA Richard Brown. “In one egregious example, a defendant allegedly stole the identity of a dead Queens woman – who wound up being buried in an unmarked grave on Hart’s Island when no next of kin could be found –to assume control of her properties in Queens and Florida, resulting in her illegally collecting tens of thousands of dollars in rent, raiding and clearing out the woman’s bank accounts, falsifying documents and collecting money from the Build It Back program and attempting to sell one of the properties for $800,000. I thank DOI Commissioner Peters and his staff for exposing the fraud associated with this worthy recovery program meant to assist needy New Yorkers, and the Office of the Queens County Public Administrator Lois M. Rosenblatt and her staff for their cooperation and assistance in the investigation.”

According to DOI, the investigations were initiated through audits conducted by the agency’s Integrity Monitors and from tips received from the City’s Housing Recovery Office.

“DOI’s investigations are ongoing and aimed at ensuring aid rightfully goes to families who are still trying to rebuild almost five years after the devastating storm,” Peters added.